Clean Slate. How to move forward with tech adoption by looking more laterally

Financial Advisory

13 October 2022

Business ModelConsumer DutyFinancial AdvisoryInvestment PlatformProfitabilityTechnologyWinning Advisers

Expert: Andrew Back Facilitator: Innes Miller


  • Technology can impact the value of your firm
  • Technology adopted should meet current business needs and those of the firm’s target market
  • When considering their technology architecture, firms need to carefully consider how it will serve the needs of both the business, current clients and prospects – especially where the technology forms a core part of the product and service proposition delivered to the client


The choice of technology can have an impact on the value of your firm. Large FS firms are acquiring small and medium sized firms at an accelerating rate and are looking to acquire firms that can be easily integrated.

In addition, firms that have chosen a business model and technology architecture that enables them to derive revenue from a greater share of the value chain are likely to attract higher revenue multiples.

Consideration should be given to the target market and the needs of individuals within it. Some of the points mentioned in relation to this are:

  • The focus must be on delivering against good client outcomes
  • There must be an ongoing suitability review – this should be through progress meetings, annual, reviews, assessment

Considerations should also be given to the functionality required to effectively serve the needs of specific business needs:

  • In serving lower value clients, how can this be achieved effectively and profitability using technology, or should the firm go through a process each year of writing to clients to explain that their service is no longer suitable for them because they don’t fit within their target market
  • The minimum cost to serve is on average around £1500
  • Linked to this, it is also about de-risking the business – firms have achieved this by adopting risk rated funds and multi-asset funds

While not discussed at the roundtable, this message and theme sits very much within the Consumer Duty, given that firms will be required to consider customer outcomes across price and value, consumer understanding, consumer support and products and services. This will take due diligence requirements to another level.

Under the right business model, firms can be in more control. Multrees shared how their platform and technology can help firms to be in more control of the delivery of their client proposition and overall client experience at a time when the more traditional platforms are offering less in the way of differentiation.

A further benefit of this approach is the value that it can add to a firm and the multiple that could be applied. However, careful consideration should be given to any additional regulatory approvals that might be required, additional resources, additional requirements on management time through upgrades to governance and oversight required to manage this change in approach / business model. The question of how this change in approach will also impact PI premiums, given the additional perceived risk being taken on by the firm, should also be considered.

Key takeaways:

  • Combined with Consumer Duty action, firms should ensure that the technology underpinning delivery of their product and service proposition should meet the needs of their target market
  • Firms will be required to strengthen their approach to due diligence and ensure they are demonstrating appropriate levels of consumer understanding and consumer support
  • Firms will need to define the value of the platforms they use, and show that they meet the needs of their target market.